A federal budget for hopeless optimists was delivered by the Morrison Government on 2 April 2019

https://youtu.be/C64ZC-0Oju4

This was Australian treasurer and Liberal MP for Kooyong Josh Frydenberg delivering his first budget speech on 2 April 2019:

Tonight, I announce that the budget is back in the black and Australia is back on track.

For the first time in 12 years, our nation is again paying its own way….

John Howard and Peter Costello paid off Labor’s debt. And tonight the Morrison government sets a path to do it again, without increasing taxes.

This matters because over the last year the interest bill on the national debt was $18bn.

And this was in a low interest rate environment.

This is money that could have built 500 schools or a world-class hospital in each state and territory.

We are reducing the debt and this interest bill.

Not through higher taxes, but by responsible budget management and by growing the economy.

In the actual budget papers he asserts that:

Net debt in 2019-20 is expected to be $361 billion, representing 18 per cent of GDP. By 2022-23, net debt is expected to decline to $326.1 billion (14.4 per cent of GDP). Net debt is then projected to be eliminated over the medium term (2029-30)

So whose debt is Frydenberg complaing about and why is the economic furture so suddenly rosy?

At the end of the month in 2013 in which Tony Abbott became Prime Minister of Australia the gross national debt stood at est. $220.67 billion and net national debt was $174.55 billion. At the time net national debt was in the vicinity of 13% of GDP.

By 2 April 2019 the Abbott-Turnbull-Morrison Government had raised the gross national debt to $534.42 billion. 

That's more than double the national debt left by the previous Labor federal government.

Frydenberg is predicting that gross national will rise to $627.26 billion by end of June 2019 with net national debt coming in at $373.47 billion and net debt predicted to come in at 19.2% of GDP by end of June. 

By 30 June the federal government will have paid $18.15 billion in interest on this debt in the 2018-19 financial year.

I don't know about anyone else but to me it definitely looks as though the Liberal-Nationals Coalition governments have well and truly contribted to the national debt in the last five and a haf years.

According to the 2019-20 Budget that Frydenberg just delivered gross national debt is expected to rise for the next three financial years while at the same time it is hoped that net national debt will decrease.

When it comes to national debt a net decrease in the debt does not always mean the actual government debt is falling - it simply means that the government of the day expects to have enough assets and income to honour the total debt if the entire amount was theoretically called in by the debtors.

However, Frydenberg predicts that both net national debt and interest that the gross debt attracts will fall over the next four financial years, despite federal government expenses increasing and expected tax receipts (including GST receipts) being revised down by $26 billion over those same four years.

Frydenberg also says the Morrison Government will deliver an underlying cash balance of $7.1 billion by 30 June next year even though that underlying cash balance is $4.1 billion in deficit this year. To do that the Treasurer has to pull $11.2 billion out of his back pocket in the next fourteen months.

Months in which it is committed to delivering the cash splash it has included in this pre-election budget.

An ordinary voter like myself has to ask: Where's the money coming from to supposedly get the government books back into the black?

The Morrison Government must be privately asking itself the same question as Budget Statement 7 only gives that government a 70 per cent chance of being able to bring in a $7.1 billion suplus this coming financial year

Budget 2019-20 papers can be found here.

NOTE:

Only one item in the Morrison Government 2019-20 budget is likely to be passed on 3 April 2019 before the Australian Parliament is dissolved to meet the required timeline to issue  writs for the federal election. This means that all the budget promises made by Frydenberg are on the never never and if the Coalition Government wins that election it may change some budget details come 30 June.

Did Morrison & Co send your chance of getting a decent pay rise up in smoke?

“Brace yourselves Australia — everyday things are about to cost more, and your chance of a pay rise has gone up in smoke” [News Corp Journalist David Ross writing in news,com,au, 8 March 2019]

Well it had to happen. After five and a half years of an Abbott-Turnbull-Morrison Coalition Government the nation has reached what is known as a per capita recession.

This hasn’t occurred since the Howard Government’s last full year in power.

Almost sixty per cent of Australia’s Gross Domestic Product comes from consumer spending and five and a half years of deliberate wage suppression by both the federal government and the business sector means the majority of consumers have little to spend.

The economy has been markedly slowing under Scott Morrison’s economic policies, first as federal treasurer then as prime minister.

Annual growth has now fallen to just 2.3 per cent according to the Reserve Bank.

This slowing has a cascade effect.

All economists news.com.au spoke to suggested the per-capita recession would hamper wage growth and — combined with increasing costs of living — make things more expensive.

“It’s a feeling of lethargy in the economy rather than outright collapse, It makes it very hard for wages to pick up when the economy is depressed,” Mr Koukalas said.

If as an ordinary worker you feel like you have been financially marching backwards for the last five and a half years then you probably have

“Backing business generates higher wages, jobs & growth.”  [Australian Treasurer & Liberal MP for Kooyong Josh Frydenberg, Twitter, 8 March 2019]

Such a confident quote from a Coalition Treasurer in campaign mode - but is it true?

According to the Dept. of Prime Minister & Cabinet/ASIC at the end of the period 30 July 2013 to 31 June 2014, there were est.2.6 million actively trading businesses in Australia and, according to the ABS by the end of  2017-18 there were 2.3 million actively trading businesses in the market sector in Australia.

Despite the Morrison Government alleging that by November 2018 it had created 1.2 million more jobs since September 2013, it's easy enough to see that in January 2019 the seasonally adjusted unemployment rate was only 0.6% lower than it was when the Abbott-Turnbull-Morrison Coalition Government came to power in September 2013.

Additionally, it would appear that the ratio of unemployed persons to job vacancies in late 2013 was est. 20 unemployed individuals for very 1 job vacancy and by December 2018 this stood at an est. 15.57 unemployed individuals for every 1 job vacancy.

So what about wages growth?

The Global Financial Crisis ran from 2007 to 2008 and Australia came through this crisis relatively unscathed.

So with little structural damage to our financial institutions or the industry & business sectors, the national economy should be chugging along nicely.

By now ordinary workers should be reaping the rewards for their productivity - as labour input to market sector multifactor productivity increased by 3.0% overall on quality adjusted hours worked basis in 2017-18 (while capital input only grew by 2.0%).

The biggest labor input increases occurred in Administrative and Support Services (8.2%), Manufacturing (3.8%), Accommodation and Food Services (3.7%), and Professional, Scientific and Technical Services (3.7%).

However, this is what each Australian's nominal slice of the economic pie looked like by December 2018......

According to the Australian Bureau of Statistics (ABS) in the December Quarter 2018; Compensation of employees increased by 0.9% nationally. 

In the Australian Capital Territory  the compensation increase was 2.1%, in Tasmania 1.6%, Queensland 1.5%, Victoria 1.4%, New South Wales 0.7%, and South Australia 0.1%. However compensation growth went backwards in Western Australia at -0.2% and Northern Territory -0.7%.

Also according to the ABS; The Consumer Price Index (CPI) rose 0.5 per cent in the December quarter 2018.  This followed a rise of 0.4 per cent in the September quarter, a rise of 0.4% in the June quarter and a 0.4% rise in the March quarter 2018.

It doesn't take a genius to see that nationally the effect of that December national compensation increase was actually 0.9% minus 0.5% CPI equalling 0.4% when it came to how far those few dollars in wage increase would stretch the weekly pay packet.

Why is low wages growth occurring? Well according to the Minister for Finance and the Public Service & Liberal Senator for Western Australia Mathias Cormann it is deliberate Morrison Government policy to suppress wages growth.

Low wage growth is no accident. Watch @MathiasCormann confirm that. pic.twitter.com/z8fGGCO52Z

— Australian Unions (@unionsaustralia) March 8, 2019

The result of this ongoing wages suppression? A continuation of the downward progression of disposable income and rising household debt, as illustrated in this graph from 2015 onwards.

ABC News, 9 September 2018

BACKGROUND

 Business Insider, 4 March 2019:

The ABS on Monday (4 March) released its Business Indicators results for December 2018, which showed trend growth in company gross operating profits at a healthy 9.6 per cent over the year to the December quarter.

Seasonally adjusted, that figure was even higher, hitting double digits at 10.5 per cent.

The figures were boosted by a strong performance that quarter, with trend growth up by 0.9 of a percentage point on the September quarter, or by 0.8 of a percentage point when seasonally adjusted.

The New Daily, 7 March 2019:

Chief executives and chief financial officers don’t get bonuses for increasing their companies’ labour costs – so they try not to.

Chairpersons and boards are not clapped on their collective back by institutional investors for devoting a greater share of revenue to wages – so they don’t.

And the cumulative effect of those simple realities is now unavoidable: Years of real, take-home wages going backwards while corporate profits increased, have meant household consumption is stalling and taking the economy with it.

Yet such is the myopic nature of corporate focus, business leaders react with horror to the idea that employees need a bigger share of the pie.

The business lobby claims wage increases aren’t possible without productivity trade-offs – but that’s after the productivity increases of recent years going overwhelmingly to higher profits.

Quite simply, the key business lobby groups have little credibility. They claimed reducing penalty rates would increase employment – it didn’t. They claimed cutting company tax would increase wages: It hasn’t and it won’t.

Household consumption accounts for more than half of the economy. According to the ABS, and nicely reported by Greg Jericho with helpful graphs, real household disposable income per capita has fallen back to where it was in 2010.

“Average compensation per employee” grew by only 1.5 per cent in 2018 – an even worse result than the better-publicised ABS wages index.

It’s only population growth that’s providing what little retail sales and GDP growth we have….

The Fair Work Commission (FWC) increased the minimum wage by 3.5 per cent last July – against the arguments of the business lobby – and by 3.3 per cent in July 2017. 

That increase of 6.8 per cent barely registered on the various measures of wages growth.

The conundrum of business needing consumers to have income growth, but 

not wanting to pay workers more, is a little like the “Paradox of Thrift” – it makes sense for an individual in uncertain times to save and not spend as much, but if everyone does it, uncertain times turn into bad times.

As argued here previously, business is holding a very determined wages strike. 

Corporate leaders don’t need FWC permission to do it, they just have to hang together to keep a lid on wage rises. In the process, they’re shooting themselves in the foot.

For the Coalition government, the result is a record of economic failure.

Something to think about - Part One

September 2015 to January 2019

8501.0 - Retail Trade, Australia, Jan 2019  

* All images from Twitter.

Government of Nauru: Turnbull's will comes first

Image of Nauru at abc.net.au

The small island Republic of Nauru’s official motto is "God's Will First”.

I strongly suspect that Nauru has unofficially changed it to “Turnbull's Will First” ahead of Prime Minister Malcolm Turnbull’s visit to the Pacific Islands Forum, with an eye turned towards protecting annual funding coming from the Australian Government.

Australia is Nauru’s largest trade, investment and development assistance partner, providing development assistance worth $26.1 million in 2017-18 and $25.9 million in 2018-19.

While revenue associated with the presence of the Australian regional processing centre and its ancillary service providers represents Nauru's most significant revenue stream.

That particular multimillion dollar revenue stream is said to financially benefit some of Nauru’s most powerful families.

So banning ABC employees from entering the country would have been an easy decision for the Government of Nauru to make given the current Australian prime minister’s well known animus towards the Australian Public Broadcasting Corporation.

Statement from Republic of Nauru – Update for media attending Sept 2018 Pacific Islands Forum

Published by  NauruNews at  July 2, 2018

The Government of Nauru looks forward to welcoming media from across the Pacific region and further afield, to cover the upcoming Pacific Islands Forum (PIF) in September. Due to very limited accommodation we have had to place restrictions on the number of people from all sectors who are able to attend, including government delegations and the media. There has been no restrictions placed on media attendance for any reason other than this indisputable fact of accommodation and facility availability. We are confident that a wide cross section of media will attend, as they have for previous forums. Of course, as is the case for anyone entering Nauru – and indeed every other sovereign nation – all are expected to abide by their visa guidelines (in this instance a specific PIF media visa will be issued with no associated fees), respect the laws of our country, and not engage in activities that cause or encourage disruption or civil unrest.

We recognise that media from Australia have a unique interest in Nauru due to our partnership with Australia as part of its border security operations. While we will ensure that some media representatives from Australia will attend along with other Pacific and wider media, we will be requesting they follow all guidelines and directions of authorities in order to ensure the safety and security of citizens and residents of Nauru. There are unique security and safety issues in Nauru that must be considered and respected, and the Government reserves the right to revoke the visa of any person that breaches their visa conditions.

We are ensuring that along with other media from Australia, at least one Australian TV news outlet will be able to cover the PIF and footage will be available to other outlets who are not able to attend.

It is important that media representatives travelling with national political leaders or heads of state – specifically from Australia and New Zealand – are aware that they still must apply for accreditation and an appropriate visa through the website of the Government of Nauru, as per normal procedures. No person can enter Nauru without a valid visa and anyone attempting to do so, irrespective of who they are travelling with, will not be allowed entry. Accreditation applications have now closed as per PIF guidelines, however applications will still be accepted until 5pm Nauru Time on July 3, 2018, from any representatives who wish to travel to PIF as part of a ‘pool’ with their national leader and has not yet applied. Again, these spots are limited (particularly by accommodation) and will be included in (not separate from) the overall media numbers which are still to be finalised. Media that have been issued accreditation will be advised soon, as will those applicants who we could not accommodate.

It should be noted that no representative from the Australian Broadcasting Corporation will be granted a visa to enter Nauru under any circumstances, due to this organisation’s blatant interference in Nauru’s domestic politics prior to the 2016 election, harassment of and lack of respect towards our President in Australia, false and defamatory allegations against members of our Government, and continued biased and false reporting about our country. It is our right, as it is the right of every nation, to choose who is allowed to enter.

ABC News reported on 2 July 2017:

ABC News Director Gaven Morris responded, saying the broadcaster "vigorously defends our role in doing independent reporting on our region".

"The ABC does not intend to vacate our position in the media pool covering the Pacific Islands Forum in Nauru," Mr Morris said.

"The Nauruan Government should not be allowed to dictate who fills the positions in an Australian media pool.

"It can hardly claim it is 'welcoming the media' if it dictates who that media will be and bans Australia's public broadcaster."

For the cameras Malcolm Bligh Turnbull pretends he has no power to intercede.

.@TurnbullMalcolm: It'll be regrettable not having media at the Pacific Islands Forum, but we must respect Nauru's sovereignty to determine who comes into their country. We support press freedom, but it is a matter for Nauru.

MORE: https://t.co/DfiGD6qzMe #SkyLiveNow pic.twitter.com/kHxeNH0l8B

— Sky News Australia (@SkyNewsAust) July 3, 2018

Even if Turnbull didn't want to make a personal approach to the President of Nauru - for heaven's sake - we have gone to the expense of maintaining a High Commission on that 21 km² slip of an island since August 2009. 

If he so wished Malcolm Turnbull can make the High Commissioner earn her generous salary by having her present a formal request from the Australian foreign minister to allow ABC jounalists and a camera crew to attend the Pacific Islands Forum.

However, as it is highly likely that Nauru's ban is only an anticipation of Turnbull's wishes I won't be holding my breath.

So Prime Minister Turnbull has been bitiching again about the ABC's reporting

On 14 February 2018 ABC News’ economic journalist Emma Alberici wrote:

It's also disingenuous to talk about a 30 per cent rate when so few companies pay anything like that thanks to tax legislation that allows them to avoid paying corporate tax. Exclusive analysis released by ABC today reveals one in five of Australia's top companies has paid zero tax for the past three years.

On that same day the House of Representatives Hansard recorded these mentions:

Mr THISTLETHWAITE (Kingsford Smith) (10:12): ………All of these hardworking Australians would be thrilled to know—very pleased to know—that the ABC has uncovered that about one in five Australian companies pay no company tax whatsoever in this country. Yes, that's right: 380 of Australia's largest companies pay absolutely no income tax at all—a big doughnut; a big fat zero. They include airlines, banks, financial service companies, mining, energy, clothing, steel, and telecommunications companies. There's even a condom manufacturer. That's rather appropriate, given what they've just done to the Australian taxpayer in paying no tax at all during the course of the last couple of years…..

Mr THISTLETHWAITE (Kingsford Smith) (13:49): As mums and dads pack up the kids, send them off to school and head off to work; as pensioners struggle to put the air-conditioner on because of rising electricity costs; and as students face increases in their fees because of cuts to TAFE and cuts to funding for education—these hard-working Australians, as they head off to jobs and study today, would be pleased to know that the ABC has uncovered that one in five Australian companies pay absolutely no company tax in this country. That's right, 380 of Australia's largest companies paid absolutely zero company tax over the course of the last three years. They include airlines, energy companies, mining companies, clothing companies, banks, insurance companies and a manufacturer of condoms—which is highly appropriate, given the rogering that they've just given Australian hardworking taxpayers by paying no tax. Now, given that these companies pay no corporate tax, what is the response of the Turnbull government? The response of the Turnbull government is to give them a tax cut. These companies are struggling so much that we're going to give them a tax cut! Yes, that's right: 380 of the largest companies that pay no tax will get a tax cut, despite the fact that they're increasing taxes for Australian workers by putting up the Medicare levy. We won't cop it. Labor will oppose these tax cuts and we'll stand up for average, hard-working, battling Australians……

Mr TURNBULL (Wentworth—Prime Minister) (14:03): I thank the honourable member for her question. The government is supporting and delivering lower business taxes because we know they will result in more investment and more jobs. Company tax is ultimately a tax on workers. When nearly nine in 10 Australians work for private business, surely it is obvious that it's in the national interest to support the companies that employ the overwhelming majority of Australians. But, instead of supporting policies that will create jobs and grow wages, the opposition is busy peddling the myth that business does not care about the level of tax and doesn't in fact pay tax. I'm not sure where the $68 billion of company tax receipts came from, but, according to the Labor Party, companies don't pay tax. The Labor Party wants to increase taxes; the government wants to reduce them. But we do not believe that paying tax is optional. Every Australian and every business that makes a profit in Australia must pay their fair share of tax. You'd think that was common sense, but not for the opposition. Like everything the opposition leader does, he calls for action one minute and then opposes it the next. He called for action against multinational tax avoidance and then he voted against some of the toughest anti-avoidance laws in the world. If this isn't clear enough for the members opposite, we'd be happy to arrange a briefing with officials from the Australian Taxation Office. We have introduced and, no thanks to the Labor Party, passed through the parliament some of the toughest multinational tax avoidance laws in the world. At that briefing from the ATO, I am sure that those distinguished officials will be able to provide a tutorial on the difference between revenue and profit because members opposite either don't understand the difference or they're now calling for businesses to be taxed on revenue—not profit— even if the business makes a loss. We saw that they were busily retweeting the article—one of the most confused and poorly researched articles I've seen on this topic on the ABC's website. Of course, the ABC is an enterprise that understands profit and loss.

Opposition members interjecting—

Mr TURNBULL: It does! It understands taxes; they're recipients of them. They receive them—taxpayers' funds. They understand the difference: the hard work of investing and struggling and losing money one year and then being able to offset it against profit the next—or not. No, the ABC has the same understanding of the commercial world as does the opposition. (Time expired)

The Australian Financial Review scenting blood after the prime minister’s criticism went to print with this disingenuous take on 15 February 2018:

Both premises fatally expose their author's innumeracy. The first is demonstrably false. Freely available data produced by the Australian Taxation Office show that 32 of Australia's 50 largest companies paid $19.33 billion in company tax in FY16 (FY17 figures are not yet available). The other 18 paid nothing. Why? They lost money, or were carrying over previous losses.

I’m sure North Coast Voices readers will quickly notice that Alberici was citing statistics for a baseline of around 1,900 companies and the ‘Fin Review’ columnist was citing a baseline of 50 companies - so of course the number of companies paying no tax to the number of companies paying tax is going to differ between the two baselines.

Reading the full text there does not appear to be any factuall inaccuracies in the Alberici article being complained about.

Meanwhile ABC News withdrew the online version of the economic analysis

 and updated Alberici’s companion article in order to provide further information and context.

The companion article still contains those same statistics:

Analysis by the ABC reveals Qantas is not alone — about 380, or one in five, of Australia's largest companies have paid no tax for at least the past three years.

However, these opening lines written by Alberici in the article “There's no case for a corporate tax cut when one in five of Australia's top companies don't pay it” on 14 February are now missing in action as this analysis gently sinks to the bottom of the Internet:

There is no compelling evidence that giving the country's biggest companies a tax cut sees that money passed on to workers in the form of higher wages.

Treasury modelling relies on theories that belie the reality that's playing out around the world.

Since the peak of the commodities boom in 2011-12, profit margins have risen to levels not seen since the early 2000s but wages growth has been slower than at any time since the 1960s.

The Guardian reported on 16 February that:

Guardian Australia understands ABC News management has been in crisis meetings for two days after the prime minister attacked the articles in question time and then wrote formal letters of complaint to management.

I suspect that what Turnbull took umbrage to in the first place was the fact that one article took a stronger position on why corporate tax cuts were not good for the economy or wages growth and, therefore were unlikely to benefit workers and their families and, the other article which is still online did not address this aspect of government taxation policy.

So he set out to shoot the message down and be damned to the fate of the messenger.

Of course in attempting this Turnbull created a Steisand Effect With A Twist - ensuring that the full text of “There's no case for a corporate tax cut when one in five of Australia's top companies don't pay it” has been copied onto websites he can't bully and the article's analysis is still being discussed by voters.

BACKGROUND

Do your job or quit ABC, Turnbull tells board members - The Australian

https://www.theaustralian.com.au/...abc-turnbull.../story-fna045gd-1226869241476?...

Jan 26, 2018 - COMMUNICATIONS Minister Malcolm Turnbull says ABC board members who do not want to get involved in ensuring news content on the public broadcaster is accurate and impartial should get off the board. Revealing he receives hundreds of complaints about the ABC each week, MrTurnbull said “the ..

Q&A: Malcolm Turnbull phones ABC boss Mark Scott to complain about crude Tony Abbott tweet 26 August 2015

Malcolm Turnbull slams ABC boss Mark Scott over Indonesian spy ...

https://www.dailytelegraph.com.au/...turnbull...abc.../ff6ad001ced93bb9c40eee1f4c839...

Dec 2, 2013 - THE minister in charge of the ABC, Malcolm Turnbull, rang the broadcasters boss Mark Scott last week to tell him he had made an “error of judgment” in teaming with the Guardian to run revelations that the Indonesian presidents phone was bugged.

Watch: Turnbull implies he complained to ABC about "failed" NBN ...

https://delimiter.com.au/.../watch-turnbull-implies-complained-abc-failed-nbn-coverag...

Feb 4, 2016 - Prime Minister Malcolm Turnbull appears to have implied that he made the samecomplaint to ABC management that he has previously made in public before the 2013 Federal Election, stating that the broadcaster had "failed" to provide balanced coverage of the competing National Broadband Network ...

Australian Tax Office, 2015-16 Report of Entity Tax Information

URL: https://data.gov.au/dataset/c2524c87-cea4-4636-acac-599a82048a26/resource/b84c2b8d-c595-4219-987d-fc1add7f00f0/download/2015-16-corporate-report-of-entity-tax-information.xlsx

This report contains the total income, taxable income and tax payable of over 2000 corporate tax entities for the 2015-16 year. This report also includes separate lists of entities whose information was not available by the cut-off date to produce the Report of Entity Tax Information for 2013-14 and 2014-15.

Rise in perception of corruption in public service

In 2016-17 the Australian Public Service Commission (APS) finalised investigation of 1,720 code of conduct complaints which resulted in 1,494 breach findings. 

Sanctions were applied in the majority of breach cases by way of either official reprimand, reduction in salary or fines. Only 18.3 per cent of sanctions took the form of termination of employment and just 11.3 percent resulted in reduction in classification or reassignment of duties.

The most serious of these breaches by classification appeared to be:

287 breaches involving failure to behave honestly and with integrity;

126 breaches involving failure to use Commonwealth resources in a proper manner and for a proper purpose;

64 breaches involving improper use of: inside information, duties, status, power or authority;

50 breaches involving providing false or misleading information;

44 breaches involving conflict of interest; and

16 breaches involving failure to comply with all applicable Australian laws.

According to the Commission:

In the 2017 APS employee census, 5 per cent of respondents reported they had witnessed another employee engaging in behaviour they considered to be corrupt. 

Of that 5 per cent:

1. Sixty-four per cent of those respondents reported that they had witnessed cronyism.
2. Twenty-six reported that they had witnessed nepotism in the workplace.
3. Twenty-one per cent reported that they had witnessed ‘green-lighting’, that is making official decisions that improperly favour a person or company, or disadvantage another.

The Guardian on 10 January 2018 reported this as representing a significant increase from the 2.6% who witnessed corruption in 2013-14 and the 3.6% of respondents in 2014-15.

The Australia Institute, 10 January 2018:

Corruption’s $72.3 billion hit to GDP

New research released today by the Australia Institute estimates the effects of rising perception of corruption in Australia since 2012 could have reduced Australia’s GDP by $72.3 billion, or 4%.

[Full report - see PDF below]

“Since 2012 Australia has slid from 7th to 13th on Transparency International’s Corruption Perception Index (CPI), with index score declining from 85 to 79,” said Rod Campbell, Australia Institute Director of Research and co-author of the report.

“Economic analysis estimates each point decline in this score translates into a reduction in GDP per capita of $486. Extrapolating across Australia’s population, our GDP could have been $72.3 billion higher this year had we maintained our 2012 reputation for minimal corruption.

“This is in line with World Economic Forum estimates that corruption costs 5% of GDP worldwide.

“The economic impacts of corruption are well-known. Business costs increase, capital is not allocated efficiency and inequality worsens.

“Australia needs policies to address this threat to our economy.

“A federal ICAC with teeth is needed to increase public trust and tackle the perception of corruption in Australia.

“The perception of corruption is on the rise, the number of public servants who have witnessed corrupt behaviour is on the rise and public trust in federal parliament is at an all-time low.

As well as the obvious democratic cost, corruption and the perception of corruption also costs our economy.

“Not only does corruption cost business, businesses do not want to operate in countries where there is a perception of corruption.”

“This research shows that the business community also has a stake in perceptions of corruption and should be supporting calls for a federal ICAC,” Campbell said.

Type of Publication: 

Media Releases

Section: 

Economy

Government and Accountability

Download Publication: 

 P381 Costs of corruption FINAL.pdf

Author: 

The Australia Institute

Posted on:

10 January 2018